Using firm-to-firm transactions, we show that starting to supply a 'superstar' firm (large domestic firms, exporters and multinationals) boosts productivity by 8% in the medium run.
Placebos on starting relationships with smaller firms and novel identification strategies support a causal interpretation of superstar spillovers. Consistent with a model of technology transfer, we find falls in markups and bigger treatment effects from technology-intensive superstars. We also show that the increase in new buyers is particularly strong within the superstar firm's network, a “dating agency” effect. This suggests an important role for raising productivity through superstars' supply chains regardless of their multinational status. Read the Full Paper.
Presentation was provided to the Productivity Commission in Melbourne. No recording is available for this presentation.